Cheng’s Educational Fund Ltd v. Secretary for Education and Manpower

HCAL 61/2005

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTITUTIONAL AND ADMINISTRATIVE LAW LIST

NO. 61 OF 2005

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Before: Hon Reyes J in Court

Date of Hearing: 26 August 2005

Date of Judgment: 2 September 2005

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J U D G M E N T

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I.       Introduction

1.The Applicant (CEF) is a charity.  It operates the Hong Kong Cheng's Clansmen General Association Cheng Jack Yiu School, an aided primary school (APS).  CEF applies to review 2 decisions by the Respondent (PSEM) of the Education and Manpower Bureau (EMB).

2.By the 1st decision the PSEM refused to allow the School to operate a Primary 1 class in the 2005-06 school year.  The 1st decision is evidenced by letters dated 1 and 21 March 2005 from the PSEM to CEF. 

3.By the 2nd decision the PSEM rejected the School’s proposal to operate a Primary 1 class in 2005-06 on private funding instead of under the APS scheme.  The 2^nd decision is evidenced by a letter dated 15 June 2005 from the PSEM to CEF.

4.Under “tightened criteria” recently introduced by EMB, in the absence of special factors, a school within the APS scheme may not operate a Primary 1 class of fewer than 23 pupils. 

5.The School has the capacity to run several primary 1 classes.  However, since starting in 2000, the School has only been able to enrol enough Primary 1 students for a single class.  During the allocation exercise for the 2005-06 academic year, the School attracted 22 Primary 1 pupils.  Following the deadline for student allocation, the School managed to find an additional Primary 1 student.

6.CEF raises 4 specific issues on this judicial review:-

(1)     Whether the “tightened criteria” contravene the Education Ordinance (Cap.279) (EO) and the Basic Law (BL).

(2)     Whether the PSEM acted unreasonably in refusing to allow the School to operate a Primary 1 class despite the existence of “special factors”.

(3)     Whether the PSEM was unreasonable or acted in a manner that was procedurally improper in refusing to allow the School to operate a Primary 1 class under private funding.

(4)     Whether the PSEM's refusal to allow the School to run a Primary 1 class in 2005-06 (either under the APS scheme or private funding) breached CEF’s legitimate expectations.

II.      Background

7.On 25 February 1992 CEF applied for the allocation of a school by the Education Department (ED).

8.On 9 September 1997 the ED allocated the School in Ma Hang at Stanley to CEF.  The School was built to the Government’s Millennium Design and comprised 30 classrooms.  CEF contributed over $4.6 million towards the setting-up of the School.

9.The ED handed over the School to CEF in January 2000.  The School started to enrol students from February 2000.

10.In May 2002 projections released by the Census and Statistics Department indicated that the population of primary school students in Hong Kong would decrease by some 17% between 2002 and 2010.

11.In October 2002 the Audit Commission released a report on “Primary Education -- Planning and Provision of Primary School Places”.  The Report noted that many primary schools were under-utilised. It recommended that the Director of Education (as the PSEM was then designated) critically review the situation of vacant classrooms and consider the feasibility of merging and phasing out primary schools.  The Director was asked to identify alternative uses for school premises made vacant through merger or phasing out.

12.On 2 and 9 December 2002 LegCo’s Public Accounts Committee (PAC) held 2 hearings to take evidence on the issues raised by the Audit Commission’s Report.  At the time, the PSEM informed the PAC that the Government planned to adjust the threshold for operating Primary 1 classes from one-half to two-thirds of a standard class.  The standard class size is 32 for those adopting an activity approach and 37 for those following a conventional approach.

13.After consultation with the Subsidised Primary School Council and the Primary One Admission Committee, by Circular No. 17/2003 dated 27 January 2003 the PSEM raised the threshold for Primary 1 classes to a minimum of 23 pupils.  As a result, where a school had a Primary 1 class of fewer than 23 pupils and there were still unfilled Primary 1 places within other schools in the same school net (district), “the school may not be allowed to operate that class”.

14.In February 2003 the PAC released its report.  The PAC asked to be kept informed of the progress of actions taken by the EMB to ensure that the standard class size was adhered to as far as possible.  The PAC also wished to monitor the PAC’s measures to ensure the cost-effectiveness of the School Improvement Programme.

15.In the 2004-05 academic year, Districts 18 and 19 of the school net were merged.  Until then, the School had belonged to District 19, covering Repulse Bay, Stanley, Chung Hom Kok, Shek O and Tai Tam.  The merged district combined the latter areas with Pok Fu Lam, Baguio Villa, Aberdeen, Tin Wan, Shek Pai Wan, Ap Lei Chau, Wong Chuk Hang, Shouson Hill and Deep Water Bay. 

16.There had been 3 schools in District 19.  The merged district has 15 schools.  In District 19, the School ranked 2nd out of 3 on the parental choice index.  Following the merger, the School ranked 15th (last) out of 15.

17.On 16 August 2004 the PSEM wrote to primary schools to explain when a school might be allowed to operate a Primary 1 class even if it had fewer than 23 students.  The PSEM stated:-

“If the total number of Primary 1 classes on applying the 23-threshold is insufficient to meet the demand in a school net, some schools may still be allowed to operate a Primary 1 class even though the number of children allocated to it is below 23.  In such cases, consideration will first be given to special factors such as whether the school is located in a remote area where there are no appropriate alternative schools.  After taking into account the special factors, the selection of schools to operate Primary 1 class will be based on the parental choice index (details at Appendix 1) in the central allocation stage.  If the parental choice indices happen to be the same for some schools, the schools with the greater remaining number of children allocated will be given higher priority for the operation of the additional Primary 1 classes.”

18.The reference to the Central Allocation (CA) stage in the PSEM’s letter was to the 2nd stage of the annual Primary One Admission (POA) exercise.  In the 1st stage (Discretionary Places Admission (DPA)), pupils may apply to a school of their choice.  About 50% of the Primary 1 places at a given school are available for DPA applicants.  In the 2^nd stage, children who have not found a place through DPA, are allocated a school by computer, based on parental preferences indicated on an application form.

19.At the end of the POA exercise for 2005-06 school, the School had secured 22 Primary 1 students, 15 through DPA and 7 by CA.

20.The School having attracted fewer than 23 Primary 1 students, by letter dated 1 March 2005 the PSEM proposed that the School not run a Primary 1 class in 2005-06.  The School was asked to respond by 15 March.

21.At a meeting on 9 March 2005 with the School, EMB set out options in the event that the School wished to run a Primary 1 class with fewer than 23 students.

22.The 1^st option was to apply for Special Review.  Under this option, the School would need to have the quality of its education assessed.  If the assessment was “good” overall, the School could be permitted to participate in the POA exercise for 2006-07.

23.The 2^nd option was to join the Direct Subsidy Scheme (DSS).  However, the subsidy is based on student enrolment, so this option entails a risk of financial instability.

24.The 3^rd option was to apply to run a privately-funded Primary 1 class.  Under this option, CEF would be responsible for all expenses of the Primary 1 class.  This route required the School to show not just that it had enough financial support, but also that it could provide quality education.

25.The 4^th option was to merge with other institutions. 

26.By letter dated 10 March 2005 the PSEM again invited the School to comment by 15 March on the proposals in the letter of 1 March 2005.  The PSEM noted:-

“If your School eventually fails to operate Primary One class in the 2005/06 school year, our Bureau will, pursuant to the current policy, stop granting subsidy of any kind to your School after a few years.  If you wish to continue operation of your School, you may consider the arrangements set forth as follows:…”

The PSEM then summarised the 4 options discussed on 9 March 2005.

27.An annex to the 10 March 2005 letter, set out what information a school would have to provide in support of a Special Review.  The annex included the following (in agreed translation):-

“1. The School is to prove that the education provided meets the need of students' whole person development (including academic and non-academic performance and standard), and with quality.

2. The School is to demonstrate its merits and weaknesses in the four working fields (i.e. management and organization, learning and teaching, school discipline and students’ support, and students' performance), and illustrate the tactical measures implemented to match the concerned main issues during the past three years.

3. The School is to, according to the current school development plan, illustrate concisely the items for promoting school education quality.

4. The School is to illustrate the methods for ensuring the management efficiency of the school management.”

28.By letter dated 14 March 2005 the School asked the EMB to re-consider the proposal to disallow a Primary 1 class in 2005-06.  Detailed reasons were advanced in support of the School’s position.

29.A meeting between representatives of the EMB and the School (among other persons) took place on 21 March 2005.  The meeting explored whether Lingnan Primary School could merge with the School. 

30.Minutes of the 21 March meeting prepared by CEF allege that the School orally applied for a Special Review at the meeting.  Ms. Ip of the EMB is recorded by the same minutes as having declined the application straightaway without giving reasons, albeit mentioning that the School’s External School Review had just been completed in February 2005. 

31.The PSEM denies the accuracy of CEF’s minutes of the 21 March meeting.  More specifically, EMB denies that an application for Special Review was made at the time.

32.By letter dated 21 March 2005 the PSEM rejected the School’s appeal to be allowed to run a Primary 1 class.  The PSEM said that, having considered the matter in detail, there were insufficient grounds to justify permitting the School to run a Primary 1 class with fewer than 23 students.  This is the 1st of the decisions against which judicial review is sought.

33.On 31 March 2005 representatives of the School and EMB met again.  CEF made it clear then that, in view of the uncertain future of the School, CEF was not prepared to inject additional funds into the School.  For this reason, CEF said that it was not interested in joining the DSS or operating a privately funded Primary 1 class. 

34.The Government’s minute of the 31 March 2005 meeting records that:-

“Special review was also not considered as the school's ESR [External School Review] had just been completed before the release of the class structure for 2005/06.”

35.At some point in March 2005 (apparently after the School wrote its letter of 14 March 2005) the School found a 23rd pupil for its proposed Primary 1 class in 2005-06.

36.On 15 April 2005 the School wrote to EMB, applying to operate a privately-funded Primary 1 class.  The letter provided information for EMB’s assessment and approval under the following headings and sub-headings (in agreed translation):-

(1) “Regarding the learning environment and facilities”

(a) “Learning environment”

(b) “Community services”

(2) “Regarding providing quality education”

(a) “Using community resources, implementing life-wide learning out of the classroom and supporting education in society -- the Way Forward of Educational Reform”

(b) “Academic exchange programme with Hong Kong International School”

(3) “Regarding the financial support”

(a) “Portion of Salary Grant for teaching staff”

(4) “The financial arrangement of the operation of Primary 1 class with private fund after promoted to Primary 2”

(5) “Catering the preference of choice of the parents of the pupils admitted by our school during the Discretionary Places Admission stage”

(6) “Conclusions”

37.On 19 April 2005 there was another meeting between representatives of the School and EMB.  The School pointed out that its application to have a privately-funded Primary 1 class “was to show that it had complied with all EMB's required procedures”.  CEF repeated that in fact it had no wish to inject further money into the School. If EMB approved the application, the School “would seek consents from teachers to share out the workload and parents to support the arrangement”.

38.To assess the School's application to run a private Primary 1 class, EMB sent a Vetting Committee to interview the School’s staff in May 2005.  The Committee consisted of EMB officers, headed by the Principal Assistant Secretary (School Development).  The interviews were intended to afford the School with a chance to supplement and explain the details of its proposed private Primary 1 class.

39.On 15 June 2005 the PSEM rejected the School’s application to run a privately-funded Primary 1 class.  The letter stated (in agreed translation):-

“The assessment group [that is, the Vetting Committee] considers that, despite that your School has shown the sincerity and efforts to continue school operation, the plan submitted by your School has failed to prove that the School has the ability to provide quality education to the students.  Therefore, our Bureau decides not to allow your School to operate Primary One Class with private fund.  Regarding the assessment main points of the assessment group on your School's concrete plan, please refer to the annexure.”

40.The annexure to the 15 June 2005 letter read as follows (in agreed translation):-

“After assessment of the plan submitted by the School and meeting with the School's representatives on 25th May this year, having verified the information and grounds supplied by the School, the assessment group has very great reservation on whether the School has sufficient ability to provide quality education for the intended operation of Primary 1 with private fund.

(a) The plan submitted by the School was not concrete.  There was not any school strategy for successive improvement.  The School could not identify its weaknesses and need for concern items; on contrast, the plan only listed out the School's well-equipped fixtures and facilities and location convenience to organise students' activities, as well as the usual learning programmes, for example, the students’ personal e-profiles, the extra-curriculum activities and the exchange programme with the Hong Kong International School, etc for the evidence claimed as quality education.  Assessment group believed that those were only counted as regular activities, which could not show any connections between the various programmes and the effectiveness of the learning and teaching aiming at the School’s weaknesses and its improvement as well as its provision of quality education.

In the plan and during the meeting with the assessment group, the School emphasised that there were great differences among the students’ learning.  But the School could not provide improvement measures in detail, for example, the school-based curriculum plan and the teaching pedagogy, to take care of the different needs of the students.  Though the School learnt that the students left behind the standard a little bit in Chinese, English and Mathematics but the head teacher could not fully utilise the figures of the Basic Competence Assessment made by the students and the Hong Kong Aptitude Test to analyse the students’ performance so as to find out the need to improve learning and teaching and formulate successive improvement measures.  In addition, the School attributed the learning differences among the students to students’ families’ background.  Although the School had arranged various learning activities outside classrooms to broaden the students’ views, the school could not introduce appropriate curriculum strategies to fit the activities concerned and upgrade the students’ learning performance.

To sum up, the plan submitted by the School only overall outlined the direction for development but without bringing out successive improvement strategies.

(b) The assessment group doubted whether the teacher’s team of the School could have sufficient ability and would take up the responsibilities to implement the relevant plan. Upon the meeting with the assessment group, the School pointed out that the job mobility of the teachers was quite high and the serving teachers were generally [in] lack of teaching experience. Based on these, the School initiated the suggestion of peer counselling and encouraging teachers’ further their studies so to enhance their teaching professionalism.  However, the School had not clearly clarified its staffing problem and analysed in detail the rooms to be improved by the teachers and also could not formulate effective and successive measures to strengthen and uphold the teachers’ team spirit.

(c) Although the Supervisor is devoted to the school management and the school managers, viz. Mr. Leung Chun Wai, et al., are willing to exchange and share professional knowledge with the serving teachers, the management in the School could not have a systematic analysis to the weaknesses of the School and prioritise the items concern appropriately and also be lack of successive improvement strategies and measures to upgrade the effectiveness of the students’ learning.  The assessment group has reservation on whether the School has ability to provide quality education.

Concerning the School’s need of the financial support to the application for operation of Primary 1 class with private fund, upon the meeting between the assessment group and the School, the assessment group learnt that the School believed at this stage the teachers’ professionalism and devotion were more essential than the financial responsibility.

(d) In view of the overall performance of the headmaster, the assessment group has great doubt on his professional leadership and his capability for the school’s improvement and his leading the school to operate Primary 1 class with private fund."

41.The 15 June 2005 letter is the 2nd decision against which judicial review is sought.

III.     Discussion

A. Issue 1: Contravention of EO and BL?

42.According to its preamble, the EO’s functions are as follows:-

“To promote education in Hong Kong, and to consolidate and amend the law relating to the supervision and control of schools and teaching therein, and for purposes connected therewith.”

43.BL art.56 provides:-

“Except for the appointment, removal and disciplining of officials and the adoption of measures in emergencies, the Chief Executive shall consult the Executive Council before making important policy decisions, introducing bills to the Legislative Council, making subordinate legislation, or dissolving the Legislative Council.”

44.Mr. Scott SC (appearing for CEF) says that there is no evidence that the Chief Executive consulted ExCo before Government promulgated the 23-pupil threshold for Primary 1.  He suggests that, since the “tightened criteria” will lead to the demise of many schools and the redundancy of many teachers, the 23-pupil limit is an important policy decision which could only have been implemented after consultation with ExCo.  He therefore concludes that the “tightened criteria” contravene BL art.56 and are illegal.

45.In support of his argument, Mr. Scott refers to EO s.84(1).  This stipulates that:-

“The Chief Executive in Council may make regulations providing for:-

....

(h)     the size of school classes and the number of pupils permitted in classroom;

...”

46.EO s.84(1)(h) indicates (Mr. Scott says) that the size of Primary 1 classes is an important policy matter on which the Chief Executive can only act after consulting ExCo.

47.I am not persuaded by Mr. Scott’s analysis.

48.First, I do not think that EO s.84(1) helps in determining what is or is not an important policy matter.  That an item appears in EO s.84(1) cannot mean that it is a matter of high policy.  For example, EO s.84(1)(o) allows the Chief Executive in Council to regulate “school holidays”.  No one would suggest that changes to school holidays constitute “important policy decisions” within BL art.56.

49.“Important policy decisions” should instead involve matters having a wide and profound impact on the well-being of Hong Kong people generally.  I do not think that the Government’s administrative policy on the minimum number of students in a primary school class is of that order of magnitude.

50.Second, contrary to what Mr. Scott suggests, the “tightened criteria” do not frustrate the EO’s purpose of promoting education.  As Mr. Yu SC (appearing for the PSEM) points out, none of the decisions challenged results in any child failing to receive a proper education.  Nor is CEF claiming that the School offers an education of superior quality which is not available from any other school in Hong Kong.

51.The harsh reality is that Government has only limited resources for education.  There is a high cost to operating schools below capacity.  Savings achieved by withdrawing grants to under-enrolled schools would minimise the need for budget cuts among schools generally.  The financial resources freed up as a result of rationalising school funding and subsidies could then be used to improve overall quality of education in Hong Kong.

52.Accordingly, in my view there is no contravention of the EO or BL.

B. Issue 2: PSEM unreasonable on 1st decision?

53.Mr. Scott argues that it was irrational for the PSEM not to permit the School to run a Primary 1 class despite 3 special factors. 

54.The 3 factors identified by Mr. Scott are:-

(1) The fact that the School is a new institution.

(2) The merger of Districts 18 and 19.

(3) The fact that the School managed to find a 23rd pupil in mid-March 2005.

55.Mr. Scott does not say that the PSEM was unaware of (or failed to consider) these 3 factors.  Mr. Scott submits that the 3 factors are so compelling that any reasonable PSEM would have allowed the School to operate a Primary 1 class on the basis of the 3 factors.  It follows (Mr. Scott submits) that, in deciding the contrary, the PSEM was Wednesbury unreasonable.

56.I do not agree with Mr. Scott’s submission.  Let me consider each factor.

57.As far as newness is concerned, the School has already had 5 years in which to promote and establish itself.  Over that period, it has failed to attract sufficient students to run more than a single Primary 1 class in an academic year.  According to EMB's records, since its commencement, the School’s performance has only been “mediocre” and it has not been popular with parents.

58.Mr. Scott suggests that the School should have been given at least 6 years (corresponding to the 6 years of the primary school cycle) to prove itself.  But, especially given the School’s track record, I do not think that a decision to disallow the running of a Primary 1 school after 5 years can be classified as perverse or unreasonable.

59.As for the combining of Districts 18 and 19, Mr. Scott has an initial difficulty.  The merger is not identified in the School’s Form 86A Notice for judicial review as a factor which the PSEM ought to have taken into account in coming to any decision.

60.Mr. Scott fairly accepted that, if a matter was not raised in the Form 86A Notice, he could not rely upon on it as a ground for judicial review.  Therefore, it is not open to the Applicant to argue the merger of districts as a basis for the irrationality of the PSEM’s 1st decision.

61.Assume, however, that it was open for Mr. Scott to take the point.  Even then it is difficult to see how it helps his case.

62.Mr. Scott’s argument is that the merger meant that, suddenly, the Applicant had to contend with more competitors for primary school pupils.  Instead of only 3 schools vying to attract students in the old District 19, there are now 15 institutions seeking students in the merged District 18.  The PSEM (Mr. Scott submits) ought accordingly to have given the School special consideration.

63.In my view, the argument is flawed.  It is hard to see how the merger of Districts 18 and 19 can be a special factor.

64.First, it is true that there may be more schools in the new net.  But the net covers a larger area.  The number of potential pupils in the merged district is significantly greater. The School has more students which it can hope to attract.  It does not follow (as Mr. Scott suggests) that the School has been disadvantaged by the merger.

65.Second, if anything, the evidence before me suggests that the School has been able to compete for students following the merger.  The merger took place in 2004.  The School did not voice any dissatisfaction with the merger.  On the contrary, it managed to obtain 29 Primary 1 pupils for the 2004-05 school year.  This indicates that the School could cope with the consequences of the merger.

66.Finally, as to the 23rd pupil found by the School, a line has to be be drawn at some point.  Exercising their discretion, different persons may reasonably draw the line differently.  The PSEM thought that finding a 23rd student after the deadline for the POA exercise had passed, was not a sufficiently remarkable factor.  Another person might have been prepared to give weight to such circumstance.  I am unable to say that, in deciding as the PSEM did, the PSEM acted unreasonably.

67.The PSEM could be fully justified in taking a hard line.

68.For example, Mr. Yu submits that, allowing schools to scramble for students to make up the 23 student quota after the annual POA exercise, would undermine the integrity of deadlines. The orderly administration of the POA system would be at risk if schools believed that they could simply ignore deadlines.

69.The PSEM may well have had such concerns in mind when rejecting the late acquisition of a 23rd student by the School as a compelling factor.  I do not think that such consideration can be dismissed as self-evidently wrong or irrational.

70.For the above reasons, I do not think that the PSEM acted unreasonably in coming to the 1st decision.  I do not believe that the 3 factors are compelling or overriding circumstances.

C. Issue 3: PSEM unreasonable on 2nd decision?

71.Mr. Scott says that the Vetting Committee did not fairly assess the School’s plans for a privately funded Primary 1 class. The Committee (Mr. Scott contends) examined matters (for instance, whether the School had identified its weaknesses and formulated a plan to address those weaknesses) which the School had not been notified would be evaluated.

72.Mr. Scott accepts that the Committee was entitled to consider whether the School could provide “quality education”.  But Mr. Scott criticises the concept of “quality education” as too vague and subjective to form any basis for a refusal to allow a private Primary 1 class.

73.In my view, there is no substance in Mr. Scott’s criticisms.  I have set out the Committee’s comments in full in Section II of this Judgment.  It seems to me that the Committee carefully considered the School’s circumstances.  It came to a reasoned conclusion on the School’s prospects.  There was nothing superficial in the investigation which the Committee carried out.

74.The Committee expressed “doubts” and “reservations” over the School’s ability to run a private Primary 1 class of acceptable standard.  Mr. Scott suggests that these “reservations” could have been clarified and did not merit the outright rejection of the Schools private funding proposal.  But, read in context, I think that the “doubts” and “reservations” in the Committee’s report were merely a polite way of saying that the Committee was unimpressed by the School.  The Committee did not think that the School should be allowed to run a private Primary 1 class.

75.Mr. Scott suggests that, in drafting its letter of 14 March 2005, the School was guided by the criteria set out in the PSEM's letter of 10 March 2005.  If so, then (contrary to what Mr. Scott submits) the School would have been aware that it was supposed (in accordance with the annex to the 10 March letter) to identify teaching weaknesses and state how the School proposed to deal with such problems.  Accordingly, I do not think that the Committee applied evaluation criteria which would have caught the School by surprise.

76.Mr. Scott suggests that there were other procedural improprieties in relation to the 2nd decision.  He identifies these as follows:-

(1) EMB representatives breached a promise not to contact the 15 parents with children enrolled at the School under the DPA for 2005-06.

(2) EMB refused a Special Review for no good reason.

(3)     The Committee consisted entirely of EMB representatives.

77.Let me briefly consider each of the alleged improprieties.

78.There is a dispute between the parties whether EMB promised not to contact parents of DPA children.  EMB says that it did not so promise, the School says that it did. 

79.It is hard to believe that EMB would have promised not to contact the parents of DPA pupils.  It would have been irresponsible for EMB not to contact parents, since the latter had to be told as soon as possible that it was unlikely that the School would be running a Primary 1 class in 2005-06.  The parents would need advance notice to make alternative arrangements.

80.But assume that EMB made the alleged promise.  Even then, I do not see what causative bearing that could have had on the 2^nd decision so as to render the 2^nd decision unreasonable.

81.As I have mentioned above, there is a dispute between the parties on whether the School’s request for a Special Review was rejected outright without reasons by EMB.  But assume that a request for review was rejected as CEF alleges.  Again I do not see what difference that would make, as far as the 2^nd decision (which relates to private funding) is concerned.  No judicial review is sought against any refusal to conduct a Special Review.

82.On the composition of the Vetting Committee, it is unclear why the mere fact that it consisted of EMB representatives renders its decisions and recommendations unfair to the School.  EMB personnel are probably in the best position to judge whether a particular school is or is not performing in accordance with territory-wide norms and standards.

83.I have so far dealt substantively with Mr. Scott’s complaints on the 2^nd decision.  There is, however, an additional difficulty to surmount.  That is the fact that many of the matters raised in submission do not feature in CEF's Form 86A Notice.

84.The points now made about quality education and the superficiality of the Vetting Committee’s inspection are an example of this.  The Form 86A Notice only challenges the application of quality education as a criterion.  Mr. Scott now acknowledges that quality education could be used as a criterion, but questions whether it is a sufficiently objective standard.  Had the PSEM known that CEF would be changing its case to that extent, the PSEM could have adduced affidavit evidence about the use of quality education as a standard, to rebut Mr. Scott’s points.  Strictly, it is unfair for me even to consider CEF’s new points on quality education.  On this basis alone, CEF’s transmuted case on quality education must fail.

85.For the above reasons, I do not think that the PSEM was unreasonable in coming to the 2^nd decision.

D. Issue 4: Legitimate expectation?

86.CEF says that, in accepting CEF’s contribution of $4.6 million towards setting up the School, EMB implicitly represented that CEF would have a reasonable time to develop the School.  CEF contends that the acceptance of the $4.6 million therefore gave rise to a legitimate expectation that the School would be allowed to run Primary 1 to 6 classes for at least 6 years.

87.A representation giving rise to a legitimate expectation can be implied by conduct.  But the representation must be clear and unambiguous.

88.I do not think that the representation suggested by CEF can be implied from EMB's conduct in allowing CEF to run a School.  In particular, I do not see how the conduct highlighted by CEF could amount to a clear and unambiguous representation that the School would be allowed to run Primary 1 to 6 classes for at least 6 years.  On the contrary, the obvious inference to be drawn from EMB authorising CEF to run the School would be that the School was to abide by the POA system in effect at any given time.  Such system would include any threshold limits for Primary 1 students.

89.But assume that a representation can be made out of EMB’s conduct.  At best, it could only be a representation to the effect that the School would have a reasonable time to start itself up.  There is no evidence that anyone mentioned 6 years or any specific period as the time during which the School would be allowed to operate before its viability was queried.

90.In those circumstances, as stated above on Issue 2 in relation to newness as a special factor, I do not think that it can be said that EMB was unreasonable in not permitting the School to run a Primary 1 class after 5 years.  Five years cannot be described as too short a “grace period” for the School to prove itself.

91.I do not believe that CEF had a legitimate expectation to be allowed to run Primary 1 classes for at least 6 years.  If there had been an expectation that the School was to have a reasonable time in which to establish itself, 5 years was adequate for that purpose and there could have been no breach of any such expectation by the PSEM’s decisions.

IV. Conclusion

92.The grounds for the judicial review have all failed.  CEF’s judicial review application is dismissed.  There will be an order nisi that CEF is to pay PSEM’s costs, such costs to be taxed if not agreed.

Mr. John Scott S C, leading Mr. Richard Leung, instructed by Messrs. T H Wong & Co., for the Applicant.

Mr. Benjamin Yu S C, leading Ms Grace Chow, for Secretary for Justice, for the Respondent.